Steen's Chronicle: Latam blowing up? - UPDATE on trading and week -

Steen's Chronicle - UPDATE -

Normally I would only update on Sunday for coming week, but with Argentina under severe pressure and fixed income going exactly opposite of my expectations when I wrote the last piece here is quick update:

ü  IMF and World Bank increasing growth forecast looks to be the best INVERSE indicator.

ü  Argentina has been in free fall

ü  China PMI came in below 50 (confirming my main story of Asia slow-down ==> global growth down)

ü  UK policy makers are now busy ( BOE's Carney and government) "phasing out" forward guidance even before it really got started.

This leaves my medium- and long-term model in place: Asia is secular slowing down and more than consensus.

The "sugar high" of policy makers is not creating any higher interest rates. It's as always like going to Church on Sundays praying the weather will improve on Monday.Furthermore our USDJPY down-side and EURUSD upside is now starting to work. USDJPY needs to break 102.80 (where it trades right now) to retest 100.80/101.00 the 100 MA. Market is increasingly reminding me of 1997/98 in JPY. I am yet to meet a single investor who does not think USDJPY goes higher. The only question is how high?

SaxoTV did interview with me on USDJPY positioning the other day:  The overpositioning of USDJPY

Some headline and charts on Argentina and LATAM:

http://www.tradingfloor.com/posts/macro-alert-latam-risk-only-concern-driving-ars-1612253273

IBEX hurting from sell off in Argentina and LATAM

 

Insurance - CDS 5 yr - for Argentina cost 24% p.a!!!!

Conclusion:

FX:                  Model are SOFT the US dollar - model is going short USDJPY, long GBPUSD and EURUSD. Long USD EMG

FI:                    Failed to signal correctly, but... still too expensive. Take profit - and await - new impulse.. Still see fixed income lower in correction mode before data disappoint and reality about growth comes back.

EQ:                  The short IBEX working nicely - now also forced to sell S&P on model break down.

Commodity:    Short COPPER - major trend break-down. Still short GOLD (but remember weekly and monthly trend this year will be up.  Short Natural Gas - weather should warm up over the weekend in the US.

Performance Index: 110

Safe travel and weekend

Steen

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

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